Yes, you read that right. More than 1 out of 5 people living in the US are getting their healthcare paid for courtesy of the US taxpayer because they’re considered “indigent”.

That comes to roughly 70.4 million individuals. Oh, and did I mention that the definition of “indigent” for Medicaid purposes gets significantly easier to meet in 2014 – when the earning threshold for qualification goes from poverty level to 133% of poverty level?

Sadly, that’s not the whole story. Add Medicare recipients who are not indigent, and I’d guess the total today is over 100 million people who are getting their healthcare paid for courtesy of Uncle Sam as an unearned entitlement. (In 2010 approximately 27.5 million of the 47+ million Medicare enrollees were above poverty level and thus did not qualify for Medicaid.)

Why is this bad? Just remember economics in 9 words – TANSTAAFL. And I don’t think I have to tell you who’s picking up the bill for all of this.

If you’ve got any doubts, remember the above when the next round of Federal and state tax hikes hits. Because mark my words – another round of tax hikes is coming.

And when those tax hikes hit, there’s a good chance it won’t only be psychologically depressing.

An acronym that attempts to describe the cost of decision making and consumption. “There ain’t no such thing as a free lunch” (TANSTAAFL) expresses the idea that even if something seems like it is free, there is always a cost, no matter how indirect or hidden.

In finance, TANSTAAFL refers to the opportunity cost paid to make a decision. The decision to consume one product usually comes with the trade-off of giving up the consumption of something else.

Pretty soon it is going to be good luck finding a doctor. I know that none of the Doctors that my family goes to take any medicare-caide. I also know that many docs are getting out of the business. The Dems may like to buy votes, but when they can’t give out any more what are they going to buy them with?

It’ll be interesting to see the gov’t’s reaction to a sharply reduced pool of doctors while they try and provide more people healthcare. Will they “draft” doctors forcibly to get them to provide care? Wouldn’t put it past them…

Jon the Mechanic: as MCPO observed above, TANSTAAFL is an acronym for “There Ain’t No Such Thing As A Free Lunch.” It’s actually a very good description of how the world actually works, economically speaking, in 9 words.

No good or service you receive is ever truly “free”. Someone, somewhere, ultimately pays for it.

The conundrum in this is that everyone who is now on Medicare has paid the tax starting since it was enacted in 1965. And because of changes in Medicare, people have to pay for Part B, Part C and Part D.

Romney lost his chance to change the direction we’re heading because while he was a decent man and terrific businessman, he just wasn’t a fluent politician, in addition his campaign was weak & project ORCA GOTV effort was a disaster. How the f*ck do you get 3 million overall less votes than McCain, when Romney was a stronger overall candidate?

The fact that most folks are on Medicaid, and the 1986 law that provides free medical care for folks who don’t have insurance is why I believe that Obamacare has nothing to do with medical care, but the continued looting of the public and private treasury.

There will never be a shortage of doctors here. There will, however, be parts of the country that are less attractive for doctors to work, say, in rural areas, or in clusters of the inner city poor.

If American-born and trained doctors take themselves out the pool, where do they expect to go to practice? WHat country on earth that has a comparable quality of life is left that does not have universal health insurance? In those countries, doctors are paid comfortably, but not nearly as much as they make here.

The fact that so many people are on medicaid is no surprise. The economy is bad, the business model is to work towards having a large workforce of temporary or part-time workers requiring no benefits. American consumers have not exactly been clamoring to pay the sort of prices things cost when they are made by people getting paid a living wage and full benefits, and even go so far as to demonize unions that fight for these things.

And that’s at least one reason why so much of our stuff is made in China. But Chinese workers are starting to want living wages, too, so American companies are moving to Burma and Bangladesh, and Haiti. In Eastern China (where I work part of the year), factory wages are roughly level with Mexico now, and trending upwards.

I also need to point out that the standard of care you get under medicaid is decidedly different than medicare, or a nice private plan offered by an employer. If you’ve never been really broke and had to go to a a clinic that specializes in this kind of practice, you won’t know what I’m talking about.

In many states, the complaint is that medicaid and food stamps have become a de facto subsidy to fast food corporations, Walmart, and other big box retailers. Why should these companies pay for benefits if the state is willing to pick up the tab?

Like it or not, America is slowly moving towards a single-payer system. Of course, as in Canada, if you’re rich enough and don’t like the care you’re getting, you can go to private clinics. At its best (or worst), it will probably end up looking like the VA system, which is regarded by many healthcare economists as an efficient model. The VA, unlike medicare, is allowed to negotiate prices with suppliers (the republicans dis-allowed it for medicare, in response to industry lobbying).

Doctors didn’t always use to be as well-paid as they are now. But then, it’s never been so expensive to go through school, and an important factor of healthcare expense, tort law, has never been addressed. If a doctor thinks that his decisions are going to be second-guessed by an uneducated jury in a malpractice suit, you can bet that he will be ordering as many tests and procedures as he can, just to cover his but, and without regard to cost or medical necessity. So tort law reform has to be something congress tackles if it’s going to address medical costs.

Back to those foreign doctors. We’ll be seeing more of them. They’ll be happy to come, study and gain board certification, and practice for a salary that is less than what American-trained doctors might be willing to accept. That’s not to say that they won’t eventually be corrupted by the efficient marketing tactics of the pharma industry, which urges them to prescribe the Cadillac drug, instead of the equally effective Ford Pinto one, and the tort lawyers, who urge them to cover their asses with redundant diagnostics use.

There is no such thing as a free lunch, but we can try to control the cost of that lunch. But with baby-boomers lurching into late middle age, it’s no longer like we’re inviting a few buddies over for beer and burgers, but more like a society wedding.

…and for everyone who thinks they’ve been paying into medicare all of these years, it’s not like the government was carefully setting the money aside and salting it away into solid investments getting 15% interest a year.

Even so, does the amount of all of your lifelong working payroll deductions, plus compound interest, even begin to cover the cost of your knee and hip replacements? Cardiovascular surgery? Your wife’s chemo for breast cancer? I thought not. All of that gets paid for by somebody else.

Hard working taxpayers paid in $701 billion in FICA in 2010. Medicare and Social Security entitlements for the same year, -money paid out to people who also worked hard to pay taxes gain those entitlements, totaled about $1.5 trillion.

If we go to a single-payer system:

-The payer is in the driver’s seat when it comes to negotiating and controlling costs.

-All of that medicare, medicaid, Tricare, and other paperwork doctors hate pretty much goes away the minute the patient presents a social insurance card.

-Businesses no longer have to deal with health benefit plan coordination, watching insurers offer them less care for more money every year.

-If private insurers want to stay in business, they have to compete.

-We can start to focus on the idea of public health again (Minnesota is the only state in the union that really puts as much emphasis on this as the whole country used to in before the 1980’s).

Make no mistake, the healthcare industry will go kicking, screaming, and threatening all the way down. (“We’ll move to Canada!” “Obama will set up death panels for Grandma”!). But the solution has to be radical to work. As much as people are bitching about Obamacare, it does not even begin to address the problem.

When the numbers are this big, I don’t see any other way out. If someone reading this can think of one, I’m all ears.

The phrase itself (or a variant thereof) dates to at least a 1938 article in the El Paso Herald-Post entitled “Economics In Eight Words”. The original 8-word variant there was “There ain’t no such thing as free lunch.”

Walsh: Are you really serious in that “we can try to control the cost of that lunch” statement? You do realize that you’re essentially making yet another proposal which assumes that government can determine prices better and more efficiently than a free market – don’t you?

If I live long enough, I might actually see that happen – once. But I’m not holding my breath. All I’ve ever seen government do when it attempts to control prices is either (1) create artificial shortages by setting prices artificially low, or (2) create a glut by raising prices to stupid levels through price supports.

Government price controls never work as well as a free market.

Oh, and good luck on getting enough doctors from overseas. The problem won’t be in attracting those who want to be doctors here at a reduced salary. Rather, the problem will be in getting those same individuals licensed to practice in the US. Many who are practicing in healthcare fields overseas (or studying abroad) find out the hard way that they require require additional years of education and/or certification training in order to continue their career in the US. US licensing requirements in the healthcare field can be a bear.

Firsthand story: a cousin’s wife immigrated (legally) from Mexico many years ago. Before immigrating she was a practicing dentist with several years in private practice in a large Mexican city – Leon, as I recall.

She and my cousin moved to the USA. Regardless of her qualifications and professional work elsewhere, she cannot qualify even to work as a dental technician in the US without going through a 2-year certification program. And she’d essentially have to go back to dental school in the US in order to continue her career as a dentist. Licensing and practice abroad often don’t count for squat.

DoD can pull it off because they’re (1) very selective, (2) bring $$$ to the table, and (3) aren’t looking for that many doctors vis-a-vis the rest of the USA. A general model of attracting foreign talent to fill the void won’t have those advantages.

The bottom line is that nationalizing healthcare is a rotten idea if you’re a healthcare practitioner. It means your income will be essentially regulated by the government, and will be much more severely limited than it is today. However, the costs (time/effort/money) required to become a doctor in the US are not going to change, nor are the standards for professional licensing.

The result is quite predictable. What will happen is that the “best and brightest” looking at careers in healthcare will now begin to look elsewhere. That might be good for business, science, engineering, and other fields that traditionally employ very smart people. But it’s going to hammer the healthcare industry.

It’s also a rotten idea for the consumer. It guarantees that the general quality of medical care will go down over the long-term; that rationing will indeed happen (look at Canada and Great Britain); and that most of the proverbial “best and brightest” will look first at other career fields. Not exactly what we want to see IMO.

Some problems simply do not have solutions that make everybody happy. This is one of those problems. And government intervention will only make the problem worse – not better.

It is precisely because Medicare is not allowed to negotiate on drug prices that a MARKET DISTORTION has been introduced. What is happening is the opposite of a free market.

If Medicare, medicaid, and every other form of publicly provided healthcare benefit disappeared tomorrow, then you’d have a truly free market, because providers would finally be forced to compete for those patients who can afford to pay out of pocket. And the federal government can stop levying FICA taxes, and the whole problem goes right away, and government is out of healthcare for good.

I did not ignore the licensing requirements, not in the least. Fact is, in India, China, and South Africa, schools are already set up and running to prepare their clinicians and nurses to sit for US licensing exams. A word on that: the doctors and nurses in the US have a hand in this, as of course they don’t want to have their own pay structure undermined by a flood of clinicians willing to work for less. So they influence regulations in their favor, introducing another MARKET DISTORTION through regulatory barrier. It goes on in Canada as well; thousands of qualified Filipina nurses have come to Canada on caregiver visas, only to find out that they would have to start from square one to get a foot in the door of a hospital.

If we don’t control costs and get rid of market distortions introduced through the lobbying of industry, costs will only go up and up. It’s simply not sustainable. The VA system is at least mentally a little more able to tackle some of these issues, but as the wave of GWOT casualties and claimants hits the system, the only way it can cope is to force concessions from suppliers through well-supervised tender processes.

Rationed care will be forced on the population unless something is done. Government intervention has always been there; Medicare money already distorts the market.

Everybody seems to hate the idea of a national healthcare program, and always points to the UK or some other country as an example. What it tells me is that who ever thinks this way believes we can’t do a better job of implementation and operation than those countries.

This really is not nearly as complicated as it is purported to be. And it matters not whether the topic is health care, the auto industry or fill in the blank with anything from business to recreational something or another.

The United States got to it’s place of greatness because it offered competition to become the best at something. Didn’t matter in what – being the best, inventing something that others wanted/needed, improving upon a system, or discovering something useful were all rewarded and pulled almost everyone in society along the path to greatness. Everyone benefitted except those who refused to participate.

In other words, success breeds success, and productivity resulted in benefits. Those who exercised their freedom to not produce didn’t share in the benefits of productivity.

So how does removing the incentives to produce things by being rewarded for productivity do anything for society as a whole or most individuals within that society? Again, it really doesn’t matter whether we are talking about health care or life in general – the same pricniples apply.

OWB, I agree with you on that, but in this case, we’re not talking about the auto industry or IT, or something that is not a critical public good or service like defense, law enforcement, or the court system.

Under the present model, with a weakened public healthcare system, we are in pretty poor shape for any pandemic disease that hits. It’s a matter of “when”, and not “if”. It can be bird flu, -which is still being watched, or something totally bizarre and unanticipated like SARS. With 7 billion people on the planet and air travel between countries 24/7, just how much time are we going to have to put together a meaningful response from where we are now?

So far I don’t see any private sector healthcare provider stepping up to the plate. So when a pandemic happens, all we have to manage it with is what’s left of the infrastructure we had up until the 1980’s. There will be no “standing start”.

Israel has had universal healthcare since the 1920’s. It’s financially healthy and in some years even runs a surplus. The quality of care is regarded as the most technologically advanced in the world. They are ready to deal with a global pandemic. Is there any reason why America can’t be in a similar position?

So it goes back to the idea of public healthcare being for the common good. Soldiers don’t do what they do for money. Cops don’t maintain law and order out of a profit motive. Firefighters don’t go into a burning house because they think there is a pile of money laying on the coffee table.

Walsh: the nation of Israel has only existed since 1948. It is therefore impossible for Israel to have “had universal health care since the 1920s”. That would require Israel to have done something 20 years before it existed.

You should also be aware that FICA taxes are predominantly collected to support Social Security, not Medicare and Medicaid. If both Medicare and Medicaid went away tomorrow, FICA taxes would still exist. And they’d go down less than 20%.

The total FICA tax rate is 15.3%, split evenly between employer and employee. Of that, only 2.9% is earmarked for healthcare (Medicare). The remainder, 12.4% of payroll, goes to Social Security to fund Old-Age/Survivors/Disability benefits. And absolutely none of FICA taxes go to Medicaid or other public health programs.

Further, the US has something called the “Public Health Service”. Their mission includes coordinating US response to public health emergency situations. If you’re concerned about epidemic/pandemic response, you might want to consult their mission statement – and complain to your Congressman if you feel they’re not doing their assigned mission well enough.

You’d be well advised to check your facts better before you comment, fella.

Israel has never been “…financially healthy” and any surplus is an accounting error. Israel receives significant monies from America and Europe, but due to political governance and need for elevated spending on defense, has outrageous inflation and the fiscal soundness of Greece.

When was the last time a public health service nurse came to your door during an epidemic? PHS doctors & nurses are pretty rare these days. See: http://www.tennessee.edu/govrelations/docs/Public_health.pdf for a clearer picture of how few people are actually involved in shoe-leather type public health work, and how the where the budget cuts will be.

And your breakdown for FICA revenue distribution actually strengthens my original point: Medicare is completely underfunded and can’t continue the way it is.

DaveO: I was not referring to the state of Israel, but rather its sick funds. These actually work like Blue Cross/Blue Shield used to, before they lost tax exempt nonprofit status in 1986, and allowed some of their members to go for-profit and even go public beginning in 1994 (Wellpoint, I think is the largest of these).

At the risk of again stating the obvious, Walsh: the various Israeli sick funds which predated Israel were of necessity private entities. (Indeed, the one you cite was affiliated with the Histadrut labor movement vice any government.) Since there was no Israel, they were obviously not Israeli government-run universal healthcare. So never mind oranges – here you’re comparing apples to watermelons. Any comparison between compulsory government-run universal healthcare and a private, voluntary healthcare system is simply not valid.

And you are aware that Israel has only had compulsory national health insurance since 1995 – aren’t you? At least that’s what is says in the Wikipedia article you cited above.

My point regarding FICA had no relationship to whether or not Medicare is underfunded; very obviously it is. So is Social Security and virtually everything else the Federal government does. The Federal government currently spends around $4 for every $3 it receives in in taxes. At present, everything the Federal government does is underfunded. That is because the Federal government is trying to do too many things for which it has no clear Constitutional authority. Healthcare is merely one of many such things that are collectively breaking the Federal “bank.”

Instead, my point – which I explicitly stated above, but you seemed to have missed – was that even if Medicare went away entirely that would not have a particularly large impact on FICA taxes. Your comment above implies that Medicare taxes are a major portion of FICA and that “fixing” healthcare would have a major impact on FICA taxes. Medicare is not even 20% of FICA; getting rid of it entirely would therefore have only a modest effect on the overall FICA tax “bite”.

having worked in Medicare and state data for a good decade and published a few papers, I do have a bit more about this. Medicaid is run by the states with Federal money. You have to qualify for that with the state agency and its a state by state program. Health has nothing to do with it except get the data (some states do better than others with the data, Missouri has it online to look at in its MICA).

A lot of the people on Medicaid actually work. Thing is they don’t make a lot of money. Wal Mart provides no insurance and keeps their wages just above minimum wate. Other usual places are at minimum wage. That’s the poverty level. But a lot of businesses (think Murray Energy) thing its a God given right to screw their employees and provide no benefits, and the rest will pay for it while they do their damndest to avoid any taxes. Mitt paid 15%. Anybody here get that good of a deal (except if you have a medical that enables you to pay no taxes on your retirement – note: Mitt thinks you’re a welcher too. Bastard has NO service in his family).

Thing is, states suck. and they need a LOT of Federal support, from roads to infrastructure to cops to whatever grant they can suck up. You cut state taxes, Feds are going to pay. Cut Federal taxes, states are going to raise theirs. There is NO free lunch. And red states suck more than others. They’re also poorer. Yet they want no taxes and no government. Fine, fuck Georgia, we’ll close all the military bases, shut down all Federal spending, same for NC. See how long you last.

We need to prime the pump on jobs. FDR knew how to do it, Clinton knew how to do it. Cutting taxes on the very rich is not economically the way to go. Neither is austerity. That means military retirement gets cut with everything else.

But we’ll see what happens.

One thing about a single payor system. Insurance companies get about 35-40% in overhead. Medicare gets 2%. And they actually can find insurance companies to be their ‘fiscal intermediaries’ that pay out the money. Every other nation has it in the first world. We’re the only one that has a political party specifically against it.

“Wal Mart provides no insurance and keeps their wages just above minimum wate”. I’ll have to tell the wife, ex AF, she can probably get back all that money she’s paid in to the health insurance at Wal-Mart, because it doesn’t exist. Ditto with her disability insurance, right?
Then she can give back the dollars she makes, over minimum wage. She’s very well compensated.
Try to know what you speak of, before you put it out there for everyone to see.
“Thing is, states suck. and they need a LOT of Federal support, from roads to infrastructure to cops to whatever grant they can suck up”. That’s because the Feds try to tell them what the states have to have and have to do, but the States can’t just print up a couple of billion bucks to do it with, only the Fed can do that.

Gee, exAF. For someone who’s “published a few papers”, you don’t seem to know much about how to do basic research.

Per HHS, in CONUS the poverty level for a family size 2 in 2012 was $15,130. Using the standard 2087 hours for estimating a full-time staff-year, and the Federal minimum wage of $7.25/hour, I get 2087 x 7.25 = $15,130.25.

In other words: you’re . . . wrong. In CONUS, full-time work at minimum wage is well above the Federal poverty level for a single guy/gal, and appears to be just above the poverty level for a family size of 2.

Oh, and Morgenthau would disagree with you about FDR knowing how to “prime the pump on jobs”. In May 1939, Morgenthau – FDR’s Secretary of the Treasury – stated outright that FDR’s policies had done little but spend money and run up an enormous Federal debt with nothing significant in the way of employment to show for it. See Morgentahu’s diary (Roll 50) at

“FDR knew how to do it.”
CCC = Civilian Conservation Corps a public work relief program for unemployed unmarried men built facilities at 800 national parks and upgraded state parks, planted 3 billion trees, updated forest fire fighting facilities, added service roads to national parks.

PWA – Public Works Administration, built schools, streets and highways, hydro-electric dams, airports, bridges, and warships for the Navy

Those were all New Deal projects funded by the government. They were NOT free market jobs. FDR saw this as the ONLY way to get the country back on its feet during the Depression. We have not reached that point yet, and we may not do so, but what you seem to be saying is that we should go into a socialist labor environment when we do not need to do so.

Those programs were all drawing down by 1940 and ended just ahead of the start of World War II.

The drawback to it, as my mother told me, is that if you did get a job, you went where they sent you, whether you liked it or not. She got a job with the WPA and was sent out to California. She also told me that her pay with the WPA was better than her pay from the permanent job she found in Chicago after the WPA ended.

We don’t need another FDR program. We need some common sense from the government, which seems to be sorely lacking at this point.

The one huge, glaring dif between FDR’s programs that PH itemized above and what is being done today is that even FDR expected people to earn what was handed to them instead of sitting home in front of the flat screen contributing nothing while expecting to live large. Not that FDR’s version of productivity was actually a legitimate expense of other people’s money, but it sure beats what we have today where the “poor” have much more than we who are paying for it all.

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About thisainthell

We are all military combat veterans and we write primarily from that perspective. Everyone who writes here has a Combat Infantry Badge, a Combat Medic Badge, a Combat Action Badge or a Combat Action Ribbon. We write about issues that matter to combat veterans..read more »